Burma To Allow 100 Percent Foreign Ownership

[News_Editor]

Foreign companies looking to invest in Burma will be allowed up to 100 percent ownership of firms operating in the country, according to a senior government official cited in a report by AFP. “Foreign companies will be allowed to invest to own from 35 to 100 percent†of domestic firms, said Kan Zaw, the deputy minister for national planning and economic development, on Wednesday. In a televised speech on Tuesday, President Thein Sein said his government would seek to attract more foreign capital with a “competitive†investment policy.

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[NomadJoe]

"allowed up to 100 percent"

Only "up to" 100%. Well what if I want to own 110%? dam_n xenophobes!

[falang07]

"allowed up to 100 percent"

Only "up to" 100%. Well what if I want to own 110%? dam_n xenophobes!

If you want to pay 110%, why not, you can get a certificate that you own it for 110% (I am sure they will be happy to provide it :-)

[tombkk]

If you want to own 110%, you'd better go back to school first.

The announcement does make sense, because in Thailand I am only allowed up to 49%.

The problem with 100% foreign ownership in Myanmar is that the minimum investment will be very high: US$ 300,000 in manufacturing or US$ 150,000 in the service industry, if you want to take advantage of the Foreign Investment Law (which gives you tax breaks), or US$ 50,000 in the service industry (I forgot how much in manufacturing) if you want to open as a normal company without these tax benefits.

For comparison, in Cambodia I can open a company 100% owned by me, without a mandatory minimum investment.

[simon43]

Tom - can you clarify your understanding of the investment requirements for a 100% foreign-owned company?, (and I understand that the new Foreign Investment Law is not yet ratified by the government).

My understanding was that a minimum investment of $300,000 was needed for a service company. Has that original proposal been reduced to $150,000?

I'm also intrigued by your comments that only $50,000 is required for a service company for 100% foreign ownership, but without the tax breaks. Have I understood you correctly on that?

Next week, I start new employment in Yangon, as a way to familiarise myself with the language, culture, business procedures etc. But my end goal is to build a small hotel (10 rooms - similar to my existing Phuket hotels), under my 100% ownership. If I can achieve 100% legal ownership of the business with a $50,000 investment, then I'll be a happy guy - $300k is beyond my budget!

Your comments and from others about this subject are much appreciated

Simon

[tombkk]

Tom - can you clarify your understanding of the investment requirements for a 100% foreign-owned company?, (and I understand that the new Foreign Investment Law is not yet ratified by the government).

My understanding was that a minimum investment of $300,000 was needed for a service company. Has that original proposal been reduced to $150,000?

I'm also intrigued by your comments that only $50,000 is required for a service company for 100% foreign ownership, but without the tax breaks. Have I understood you correctly on that?

Next week, I start new employment in Yangon, as a way to familiarise myself with the language, culture, business procedures etc. But my end goal is to build a small hotel (10 rooms - similar to my existing Phuket hotels), under my 100% ownership. If I can achieve 100% legal ownership of the business with a $50,000 investment, then I'll be a happy guy - $300k is beyond my budget!

Your comments and from others about this subject are much appreciated

Simon

US$ 300,000 is for manufacturing companies, US$ 150,000 for service companies, under the new foreign investment law (FIL). Whether or not it is in place yet is a bit blurry, it depends on who you ask...! If you are going next week, it can be different again, please update us.

Foreign ownership without tax breaks (i.e. under company registration law, not FIL) seems to have been in place for a while, at least that's what the lady from the company registration department said. She couldn't understand why we would want to go down that road, as we would have to pay taxes - and any amount of money for investment would not be an issue for a westerner.

Remember that this is a country that was closed for 40 years, they never learned to understand how we think. My suggestion is you go to the company registration department and try to register the company for US$ 50,000 in paid-up capital (part of which can in the form of assets, such as furniture for your hotel). If they say "no way", I will give you the contact details of this lady in Naypyidaw.

[DagonKhan]

US$ 300,000 is for manufacturing companies, US$ 150,000 for service companies, under the new foreign investment law (FIL). Whether or not it is in place yet is a bit blurry, it depends on who you ask...! If you are going next week, it can be different again, please update us.

It is not in place. The proposed new FIL is yet to be put before parliament, they're still in the consultation phase and it's one great big mess. Don't hold your breath!

[Fletcher]

US$ 300,000 is for manufacturing companies, US$ 150,000 for service companies, under the new foreign investment law (FIL). Whether or not it is in place yet is a bit blurry, it depends on who you ask...! If you are going next week, it can be different again, please update us.

It is not in place. The proposed new FIL is yet to be put before parliament, they're still in the consultation phase and it's one great big mess. Don't hold your breath!

CORRECT, it is not in place, and apart from 'part' ownership in Local companies there is basically nothing new in the announcement. Even that point could be a moot one, as foreigners have always been able to buy equity in local companies, but even if you buy 1% of a 'local' company it has to be converted to a 'foreign' company.

Moreover there is currently a massive lobbying effort by larger local companies, to get the draft changed to be comparable to Thai rules, i.e. a local majority.